Budget 2023 to take place two weeks early in September 

The Irish Government's Summer Economic Statement has revealed that the forthcoming Budget will contain spending and tax measures equal to €6.7bn.

Budget 2023 is set to be announced on 27 September, which is two weeks earlier than planned. It will include €5.65bn in spending and just over €1bn in tax measures.

Spending next year will increase by 6.5%, according to the Summer Economic Statement, in what has been described a ‘temporary once-off increase’, which breaches the Government’s own spending rule of 5%.

Of the total Budget package of €6.7bn, €3bn will be allocated to maintain existing levels of public services, leaving €3.7bn for decisions to be announced on Budget day, including the €1bn in tax measures.

In addition, there will be another €4.5bn in non-core spending allocated to Covid-19 and assisting people from Ukraine.

The boost to tackle the fallout from inflation, which was 9.6% last month, is underpinned by exceptionally high corporation tax receipts; they are €3bn or 53% higher in the first half of this year, compared to the same period last year.

“Budget 2023 – ‘A Cost of Living Budget’ will provide for an overall package of €6.7bn with additional public spending of €5.65bn and taxation measures amounting to €1.05bn,” said Minister for Finance Paschal Donohoe.

“This tax package is double the amount set in the original strategy and, once again, reflects the need to adjust the parameters given the higher-than-assumed inflation. A key objective of taxation policy in Budget 2023 will be to avoid workers paying additional tax simply because they move through higher tax brackets because of inflation.”

The Minister for Public Expenditure and Reform Michael McGrath noted that while the public finances have remained resilient, esuring this continues to be the case is a key priority.

“As we enter the second half of the year, we are faced with significant challenges including the provision of humanitarian supports for refugees arriving from Ukraine and continuing rising prices across the economy,” he said. 

“The Government is acutely aware of the pressures these price increases place on households and businesses. The publication of the Summer Economic Statement outlines the Government’s Budgetary strategy, which will seek to protect public services, allow us to introduce further measures to address the cost of living pressures in the autumn, and at same time maintain fiscally sustainable expenditure into the medium term.”